Saudi Arabia’s Mobily surged after Etisalat, the biggest phone operator in the United Arab Emirates, proposed to boost its shareholding in the firm in a deal that could be valued at $2.12 billion.
Etisalat offered 47 riyals a share for a higher stake in Mobily, a 22.2% premium to its Tuesday’s closing price, according to regulatory filings. The offer values Mobily at 36.2 billion riyals ($9.65 billion).
Mobily shares jumped 9.9% to 42.25 riyals in Riyadh, touching the 10% daily fluctuation limit in Saudi Arabia. Etisalat gained 1.4% in Abu Dhabi.
Etisalat hasn’t made a firm offer and the companies are only in discussions at this time. The UAE phone operator already holds 28% of Mobily and is seeking to raise it to 50% plus one share.
Saudi Arabia is the biggest Gulf economy, and the potential purchase is part of Etisalat’s plans to expand in the rapidly growing telecom market in the kingdom. Etisalat “aims to deepen the strong existing ties with Mobily, with the potential for further collaboration and realization of greater synergies,” according to the company.
Etisalat is being advised by HSBC Saudi Arabia, while JPMorgan Saudi Arabia and Riyad Capital are joint financial advisers to Mobily. Bloomberg